Meta has been ordered to sell Giphy by the UK’s Competition and Markets Authority, due to unfair competing.
In May 2020, when the company, former known as Facebook announced its acquisition of Giphy, it said 50% of the Gif search engine’s traffic already came from Facebook platforms. But Giphy also provides Gifs to competitors such as TikTok, Snapchat and Twitter. Later on the company planned to integrate Giphy’s vast database of looping short video animations with another of its existing social-media platforms, Instagram.
But CMA ruled the $315M purchase of the the Gif-sharing search engine, saying: it is unfair to competing social-media platforms, Reuters says. The CMA said: “After consulting with interested businesses and organisations – and assessing alternative solutions put forward by Facebook – the CMA has concluded that its competition concerns can only be addressed by Facebook selling Giphy in its entirety to an approved buyer.”
In its latest report in the topic, BBC said that this is the first time the CMA has ever blocked a major digital tech deal. Adding: this indicates the direction of travel for the UK regulator’s oversight of similar deals going forward. The competition watchdog stated that by this action, they are protecting millions of social-media users and promoting competition and innovation in digital advertising.”
Meta disagrees with this decision, and says: “We are reviewing the decision and considering all options, including appeal.” The tech company stated that both consumers and Giphy are better off with the support of their infrastructure, talent, and resources.
Source: CNN
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